How Much Is Excise Tax On A Car In South Dakota?

South Dakota Vehicle Excise Tax Explained

Owning a car can be rather expensive from the point of buying it. But that is not all as there are other payments you have to make as well. These include dealer fees, insurance fees, registration fees, gas, and excise tax.

However, when it comes to car ownership expenses, including buying, some states are better than others because of lower initial costs, lower car insurance premiums, and lower excise taxes. Perhaps, you are wondering, how much is excise tax on a car in South Dakota?

This article will talk about excise tax rates on cars in South Dakota, car dealership areas, fees to pay like title fees and plate transfer fees, vehicle registration process, excise tax exemption, the general role of the county treasurer's office, and some frequently asked questions.

Vehicle Excise Tax Rates On A Car In South Dakota

Like most states, South Dakota charges excise taxes on cars purchased. However, some states have relaxed minimum sales tax requirements. A few states like Alaska, Delaware, Montana, New Hampshire, and Oregon do not have excise tax on cars.

This does not imply that if you live near a state with lower or no car sales tax, you can go to that state to buy a car and avoid vehicle sales tax. Instead, you have to pay the sales tax rates of the state you reside. It is also the state your vehicle has to be registered in.

If you want to buy cars, South Dakota is among the top ten most tax and fee-friendly places in the U.S. Though you can save money, you know the payments involved to register your car with South Dakota state's Motor Vehicle Division.

South Dakota charges a 4% excise sales tax rate on the purchase of all vehicles. In addition, for a car purchased in South Dakota, there are other applicable fees, including registration, title, and plate fees.

Car Dealership Areas In South Dakota

Though you can find automotive offerings spread out in smaller towns, you may have to drive into major cities of South Dakota to find car dealerships. The most promising areas in terms of a more significant number of choices include Rapid City and Sioux Falls. Pierre's capital city also boasts of a good degree of auto dealership influence.

Usually, car dealers can assist you with title and registrations. They can take care of the actual filing of your vehicle registration, title applications, and paperwork.

Taxes And Fees You Have To Pay

Aside from state and local sales taxes applicable to South Dakota car purchases, there are other taxes and fees. These fees are different from the sales tax. South Dakota's Department of Revenue does not collect them. Instead, the collection is done by the South Dakota Department of Motor Vehicles.

Vehicle Trade-In Taxes

You can trade in your old car in most dealerships. Credit is usually then applied to the new car price. For instance, you may receive a $6,000 credit against the price of a $12,000 new car. This means that the cost you actually bear is only $6,000.

As such, the taxable price of your new vehicle is $6,000. This is because the assessed value of your trade-in is not included or subject to excise tax. You end up saving on the excise taxes you would otherwise have paid on the remaining $6,000 value of your trade-in.

Dealer Rebates and Incentives Taxes

Dealers may offer you cash incentives or manufacturer rebates on the standard price of a car. South Dakota’s taxes on vehicle purchases are applied to the sale price before rebates or incentives. Thus, a $12,000 car may have a $1,200 cash rebate. However, the buyer will have to pay taxes on the car as if its total cost is $12,000. This is the case even when the buyer's out-of-pocket cost for the purchase is $10,800.

Excise Taxes

All brand-new vehicles are charged a 4% excise tax in the state of South Dakota. Excise taxes replace standard sales taxes. Furthermore, it is applied against the car or truck's MSRP.

The purchase price of motor vehicles listed on the bill of sale, sales contract, purchase order, and state reference or NADA all form the basis for the excise tax. Credit is also considered for trade-ins with licensed dealers.

Vehicle Registration Fees

Vehicle registration charges depend on the weight of the passenger car or pickup truck. The charges can range from $30.00 per year to $42.00 per year. This range is for vehicles within the weight range of 2,000 lbs or less to 4,000 lbs.

However, for cars or trucks weighing between 4,001 and 6,000 lbs, the vehicle registration fee can be around $55.00. Similarly, the charges for registering vehicles weighing between 6,001 and 10,000 lbs can get up to $65.00.

Aside from vehicle registration fees, other costs include mailing fees ($1) and a processing fee. The processing cost can be up to 2.25% for debit or credit cards or $1.50 for a check.

Vehicle Title Fees

There is an applied title fee of $5.00. Registration fee and plate transfer fee are charged $1.50 and $5, respectively.

License Plate Fees

The license plate fees can also be referred to as vehicle registrations plate fees. A license plate is attached to motor vehicles for the purpose of identification. Such registration fees are annual or biennial and are charged for each car that operates in a state. License plates in South Dakota expire according to a schedule using the first letter of your last name.

If your license plate purchase is for the first time, it will be pro-rated up till its expiration month. After that, you can pay for a full year of license plate fees.

Documentation Fees

The costs incurred in preparing and filing South Dakota's sales tax documents, sales contract, and other documents are referred to as document fees. Dealerships may also charge document fees.

The document fees, on average, can be up to $115. However, the fees vary according to the dealership or vehicle. South Dakota law places no limit on the number of document fees a dealer can charge.

South Dakota Vehicle Registration Process

When Moving to South Dakota

If you intend to move to South Dakota, you have to get your car registered. This has to be done within 90 days after your move. Thus, if the car owner is occupied with other tasks, there is enough time to get around to the registration.

From start to finish, the vehicle registration process can last anywhere between two to three weeks after sending all documents and fees to the vehicle registrations staff department. On the other hand, if the documents need to be obtained from other sources, the process could last from two to three months.

For a successful vehicle registration process, you need to bring the following:

• Application for Motor Vehicle Title and Registration
• The current title from the state of origin
• Payment for registration fees
• A Salvage, Recovered Theft, and Uniform Damage Disclosure form (if your car is less than seven years old)

For Residents of South Dakota

You may already reside in South Dakota and are looking to buy your car from a dealership. Your dealership should be able to handle the vehicle registration process. When they do, make sure you get copies of the documents to use for getting your car's license plates.

If you purchase from a private seller in South Dakota instead of a dealership, you have to get the car registered at the DMV (Department of Motor Vehicles). Take the following paperwork along with you:

• Application for Motor Vehicle Title and Registration
• A Salvage, Recovered Theft, and Uniform Damage Disclosure form (if your car is less than seven years old)
• Payment for registration fees 
• The title of the vehicle bearing your name

Cost of South Dakota Vehicle Registration

You will be required to make payment according to the schedule below:

• Non-commercial vehicles that are less than nine years old have a registration cost of around $75.60. 
• Non-commercial vehicles older than nine years have a registration cost of around $50.40. Motorcycles that are below nine years old have a registration cost of up to $18.

Sales Tax Exemption

There are limited situations where you can obtain a title without paying motor vehicle sales tax as a buyer. But this applies only to vehicles that you will not operate on streets, highways, or waterways of South Dakota. Also, the vehicle must be hauled or transported to its destination.

Only specific vehicles qualify for a title only. You can contact the local county treasurer's office to make inquiries or to apply for a title only. Your request for the title-only sales tax exemption has to be within the required 45 days of the date of purchase and prior to a title being issued.

However, though your vehicle may be approved for a title only, it is still subject to use tax. Thus, you as the purchaser are responsible for paying a 4.5% state use tax, plus applicable municipal use tax. You can do this at the Department of Revenue.

Interests And Penalties

In South Dakota, you have up to 45 days from your date of purchase of a new or used car for title transfer into your name. An assessment for late titling transfers is done on a penalty of $1 per week for a maximum of 26 weeks. If it exceeds 26 weeks, the liability for a transfer increases to $50.

There are applicable interests and penalties to the 4% motor vehicles excise tax after 45 days. You could even have additional interest due on the 60th day after purchase.

The Role Of The County Treasurer's Office

All new and used motor vehicles, snowmobiles, motorcycles, trailers, boats, ATV’s and commercial vehicles in a particular county are titled and licensed by the treasurer's office. The treasurer’s office is also responsible for releasing and notating motor vehicle liens. After that, they make a report to the South Dakota Department of Motor Vehicles.

In addition, they give assistance to taxpayers who apply for duplicate titles. Within 45 days of vehicle purchase, you can contact your local county treasurer to pay tax, apply for the title, and register your vehicles. If you bought your car outside of South Dakota, you are required to provide proof of tax paid upon title application.

In this case, contact your county treasurer’s office for any other applicable taxes.

Other duties performed by the county treasurer include collecting property taxes, mobile home taxes, investments, and property assessment freezes.

You can mail your Titling Transfers, Renewals and Handicap Placards to the County Treasurer's Office. Use their mailing address for this. South Dakota offers a reciprocity tax credit for title transfers or interstate titles in another state. This is with the condition that at least 4% motor vehicles excise tax was paid in your former state.

Processing Of Titles

You are required to present a photo ID or a South Dakota driver's license to process titles. If these are unavailable, you have to show your current out-of-state photo ID and physical proof of social security number for all persons listed on the title.

In order to title and license a vehicle in South Dakota after purchase, you need the original title or the original manufacturer’s certificate of origin. In addition, if there is a lien against the vehicle, you need to complete a title request form. It is used to obtain the original paper title from your lienholder. This has to be done for South Dakota to issue license plates. This means that the vehicle history is essential.

There are specific requirements for trailers, fifth wheels, and motorhomes. You need to provide a document that indicates the shipping weight and VIN (Vehicle Identification Number). You can separately weigh the vehicle on a certified weigh scale. If you do not have truck stops near you, you can call the local sheriff's office, highway patrol, or state police for directions. Likewise, you can take a digital picture of your sticker within the RV (showing the VIN number and the unladen or shipping weight), print it out, and send it.

Vehicle Renewal Notice

If your name is recorded first on the title, you can expect the Motor Vehicle Division to mail you a renewal notice. It will list all vehicles in the owner's name that are due for renewal within the next 90 days. Based on your preference and if you supplied your email address to the treasurer's office, the state could send you an email instead.

Likewise, you can renew online using the South Dakota Customized Automated Registration System or in person at the treasurer's office.

Alternatively, you can renew your vehicle at self-service kiosks across South Dakota. Check your renewal notice for listed locations. One location is in Spearfish (Spearfish Rec and Aquatics Center, 122 Recreation Lane) and two other locations in Rapid City – Pennington County Administration Building, 130 Kansas City Street, Suite 250 and Rushmore Mall, 2200 N Maple Avenue.

You can also renew your local county registration in terminals in South Dakota. It is a fast and efficient process. However, you need to be the listed owner of the vehicle's title. In addition, you need a valid South Dakota driver's license or identification card. There are terminals located inside HyVee 4101 S Louise Ave, Sioux Falls, SD 57106 and Get 'N Go – 5400 E Arrowhead Parkway, Sioux Falls, SD 57110.

Frequently Asked Questions

Who pays excise tax when buying a used car?

You pay sales tax to your state’s DMV upon registering the vehicle. You do not pay it to the individual selling the car.

What constitutes proof of taxes?

Regardless of your purchase date, proof of taxes is required. Your title information needs to be checked. As such, your dealer tax affidavit and recent bill of sale indicating purchase price and/or any sales tax paid, as well as the original registration document showing state sales tax paid, can serve as proof of payment.

What about car leases and car rentals?

As regards vehicle leases and rentals, motor vehicles excise tax does not apply to automobiles, pickups, and vans that you purchase to lease to others for 28 days or less. If an individual is leasing a vehicle for themselves, they will owe excise tax.

Hire Professionals To Process Application Forms

Rather than bother with sales tax calculators or the intricacies of the sales and use taxes, vehicle registration process, titling transfers, and other processes, car buyers can have suitable professional outfits to process their application, title, and other forms for them.